How to Write a Business Plan

Every good business has a business plan that acts as the organization's framework. A solid business plan contains all vital information about the company, including any financial goals, emergency plans, and company ideals.

To put it another way - the business plan is arguably the most important first step any new business owner must take. It is necessary to take the time to write out a business plan before launching a business, as failing to do so may ultimately lead to disaster.

However, sitting down and writing that first business plan can be intimidating. After all - there's so much riding on it. Here are some tips on how to get started writing your first business plan.

Executive Summary

The first part of any business plan should be the executive summary. This should include the mission statement (your company's goal) and basic company information. For example, a good business plan will consist of the company's location, the starting number of employees, and who is in charge. The executive summary should be concise, so keep any descriptions to the point.

Company Description

Next comes the company description. This is where you can get a bit more detailed about the company. Ideally, the description should lay out whatever problem the company aims to resolve through its products or services.

Other details include target audience (consumers), business structure, company assets (including specialists in the field), etc. In other words, this is the place to include all the reasons why your business should succeed.

Market Analysis

Once the basics are complete, it is time to discuss market analysis. This will require some research, but it will help your idea flourish. This stage is where you take the time to research the market, its outlook, and any competitors.

While researching your competition, keep an eye out for trends, strengths, and weaknesses. You want to learn from your competitors, including what mistakes you should avoid.

Organization

Remember how you briefly described the company organization up above? Now is the time to get into further detail. This section explains who runs the company, how the business will be structured, and other relevant information.

For example, if you know this will become a large business, laying out the organizational chart (the path of promotions) ahead of time will save you trouble later. It will also provide clear goals and tracks to your employees.

Products & Services

Ultimately, every company aims to sell something - either their products or services. Use this section to describe what it is your business seeks to sell. Don't forget to include all key details about your products or services. You want to clearly explain what makes your product/service unique and why people might want to buy it.

Marketing Plan

It may feel counterintuitive to include a plan inside a plan, but this is the most effective way to manage things. All good business plans should include an overview of the marketing plan. In other words, it should consist of details about how the company intends to market its products or services.

Your marketing plan should be detailed enough to include the target audience and the best way to reach them. However, it should also be fluid enough to allow the business to adapt to the times.

Funding

Not all companies will include this section in their business plan. However, if your business will need additional funding, this section should be readily available. This section is where you explain why you need funding, including how much and what you intend to do with any given money.

Financial Plan

Yes, it's time to include another plan in your business plan. Including a financial plan is a critical step in this process. Your business plan should include all available financial information, including income statements, balance sheets, cash flow statements, financial projections, etc. Remember that the financial plan differs from the funding section, and keep the two distinct.